HUD 223(a)(7) Program - Refinance of Existing HUD Loans

Property Types

FHA-insured Multifamily Housing and Healthcare Loans

Eligible Borrowers

For profit and non-profit entities

Loan Amount

Entity can borrow up to 100% of the original principal balance



Term & Amortization

The remaining term of the mortgage plus 12 years (subject to HUD approval) not to exceed the term of the original FHA-insured mortgage

General Loan Terms

The maximum loan is the lesser of:

  • The original FHA-insured mortgage amount
  • The outstanding mortgage plus all closing costs, capital improvements, prepayment penalties, and repairs
  • 1.10x Debt Service Coverage
Interest Rate

Fixed rate, subject to market conditions at the time of rate lock


None, except standard carve-outs


Yes, subject to HUD approval


Typically loans are prohibited from prepayment for the 1st year, then have a 9% penalty declining 1% each year thereafter until 0%.  Alternative lockout and prepayment structures are available.

Mortgage Insurance Premium

0.50% at closing
0.50% annually for Multifamily, 0.55% annually for Healthcare

Professional Liability Insurance

HUD requires a minimum coverage of $1 million per occurrence and $3 million aggregate.  Waivers may be granted in cases where premiums are high and claim history is clean.

  • Cash out refinancing is not permitted
  • PCNA report required for Multifamily and term extensions